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Unless you're in a managed account that is discretionary, that could be the only way to get trails (and that would be at a 3rd party advisor(network)), Fidelity DOES NOT make trails, they get commissions, fees paid based on AUM and advisors get paid on their book size, advice offerings (base amount) and plans created.
Only commission based independent advisors make trails. It's the main reason the major B/D's don't sell A-shares w/out a waiver OR disclosure for certain institutional level clients.
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Fidelity Brokerage Services LLC, or its affiliates, may receive compensa- tion in connection with the purchase and/or the ongoing maintenance of positions in certain mutual funds in your account. FBS may also receive compensation for such things as systems development necessary to establish a fund on its systems, a fund’s attendance at events for FBS’s clients and/or representatives, and opportunities for the fund to promote its products and services. This compensation may take the form of sales loads and 12b-1 fees described in the prospectus, as well as program participation and maintenance fees, and infrastructure support paid by the fund, its investment advisor, or an affiliate.
This would suggest you are incorrect per the fidelity brokerage commission and fee schedule
Please read that more carefully, what you're quoting is in the Funds Network (3rd party & institutional part of fidelity brokerage) NOT the retail brokerage accounts.
So, the A-shares on the institutional side can/will charge (again NON-RETAIL CLIENTS), 3rd party (outside or network advisors who are NOT Fidelity Advisors/Representatives) can possibly charge BOTH a commission & receive a trail/comp for either the fund or the access to the fidelity network which can be paid through sales loads (TF, NTF or loads) and 12b-1 fees, which of course are outside or in addition to any fees the fund may charge.
Please read that more carefully, what you're quoting is in the Funds Network (3rd party & institutional part of fidelity brokerage) NOT the retail brokerage accounts.
So, the A-shares on the institutional side can/will charge (again NON-RETAIL CLIENTS), 3rd party (outside or network advisors who are NOT Fidelity Advisors/Representatives) can possibly charge BOTH a commission & receive a trail/comp for either the fund or the access to the fidelity network which can be paid through sales loads (TF, NTF or loads) and 12b-1 fees, which of course are outside or in addition to any fees the fund may charge.
Why does the link you show discuss 12b1s in all three sleeves of products if fidelity isn't paid them? I also don't see where this is restricted to institutional side only
It's inherent in that it is in the Funds Network, that is institutional and 3rd party advisors (network) only. 12b-1 can be used also for pay for access to the network AND distribution costs of the funds ranging from A to C shares. They are NOT exclusive to trails or continued holding payments.
Their institutional arm and advisor network MAY, but the retail arm which the OP is using DOES NOT.
In the retail arm where they are holding the OP a shares where does the 12b1 go? You'd have to provide me something that would show fidelity does not receive it as that is normal course of business and you are claiming it doesn't exist
12b-1 fee's are for the operation of the fund, fund exchanges, fund maintenance and are not specifically to pay an advisor/3rd party trail. 12b fee's are not specifically dedicated to pay advisors, and or clear a trail commission. Those funds that are front loaded, or institutional can/will be part of the 12b fee's to pay the advisor, but you can tell that with the higher 12b fee.
12b-1 fee's are for the operation of the fund, fund exchanges, fund maintenance and are not specifically to pay an advisor/3rd party trail. 12b fee's are not specifically dedicated to pay advisors, and or clear a trail commission. Those funds that are front loaded, or institutional can/will be part of the 12b fee's to pay the advisor, but you can tell that with the higher 12b fee.
You should provide us with something that say ALL 12b fees are for commissions or to receive trail, regardless of the type of fund it is.
I never made any claim asserting what it have suggested in the bolded. The OP said they were holding FKINX a franklin fund a share not any institutional fund. Fidelity holds this and gets paid a trail unless you can show otherwise because that's exactly how the business work nearly everywhere on the street.
I'm pretty sure my conversation on this topic has been about A shares the entire time
A shares, ARE institutional funds. What you linked to with fidelity's fee schedule shows that the INSTITUTIONAL side of fidelity may collect fee's from the MF's or from 3rd party advisors for access.
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In the retail arm where they are holding the OP a shares where does the 12b1 go?
A share front load fee's as discussed earlier in the thread are ONLY CHARGED on the purchase and paid to the advisor selling the fund, therefore by transferring to another B/D or advisor, that person then holding the fund (custody) would NOT be allowed to be paid additionally or receive any compensation for holding the fund, EVEN IN a retail account.
Yes, this has always been about the A-shares, but I also included a link for ALL share classes, for everyone's info.
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